SEMI Testifies at House Manufacturing Caucus

SEMI
Testifies at House Manufacturing Caucus

By
Jamie Girard, sr. director, Americas Public Policy, SEMI

SEMI was invited to
testify at the U.S. House of Representatives’ Manufacturing Caucus and provided
remarks at a briefing held on October 29, 2013 to examine manufacturing
innovation in the United States.

The House Manufacturing
Caucus, co-chaired by Reps. Tom Reed (R-NY) and Tim Ryan (D-OH) is an active,
bipartisan Congressional group focused on enhancing the productivity, capacity,
and competitiveness of American manufacturing.

The recent briefing was focused on reviewing the first
national manufacturing innovation institute, the three current Requests for
Proposals (RFP's) for future institutes, industry perspective on the outlook
for the National Network for Manufacturing Innovation (NNMI) and the pending
legislation to authorize future centers.

Congressman Reed and
Congressman Joe Kennedy (D-MA) recently introduced H.R. 2996, the Revitalize
American Manufacturing and Innovation Act of 2013 (RAMI). The bipartisan bill
employs public-private partnerships, combining industry and academia to create
a network of regional institutes across the country to coordinate education and
training efforts. Under the bill, institutes will be selected for participation
through a competitive, merit review process.

A companion bill, S.
1468, has been introduced in the Senate by Senators Roy Blunt (R-MO) and
Sherrod Brown (D-OH).

Representative Reed
opened the briefing to discuss the RAMI, appeal for broad support from fellow
legislators, and hear feedback from government agencies and industry
representatives. Reed said that the RAMI
act will establish a Network for Manufacturing Innovation to improve U.S.
manufactuing competitivenss and increase domestic production.

The bill promises to
build public/private partnerships through Centers for Manufactring Innovation
among higher education, community colleges as well as small and large
manufacturers to promote best practices, address advanced manufactuing challenges
and comprehensively addressed education and workforce challenges.

Briefing panel members included
Phillip Singerman, associate director for Innovation and Industry Services at
the National Institute of Standards and Technology (NIST); David Danielson, assistant
secretary for Energy Efficiency and Renewable Energy at the U.S. Department of
Energy; Aaron L. Martin, Ph.D., strategic planner, Analysis Center, Northrop
Grumman Corporation; and SEMI global vice president for Advocacy, Jonathan
Davis.

Aaron Martin described
the collaborative advantages offers by the nation's prototype innovation
institute which was recently established in Youngstown, Ohio to advance
additive manufacturing technology.

Additive manufacturing,
also known as 3D printing, is a group of new technologies that build up
objects, usually by laying down many thin layers on top of each other. In
contrast, traditional machining creates objects by cutting material away. A
diverse array of manufacturing industries — from aircraft to medical devices
and from electronics to customized consumer goods — are already using or
exploring applications of these new technologies.

DOE Assistant Secretary David Danielson spoke to the key
characteristics of innovation and how shared platforms for advanced research
and development have deteriorated in the US.
He referred to the erosion of the dense interrelated ecosystem of
R&D as the loss of the "industrial commons."

Danielson said that, “We
released competitions for three more topics, one of which the DOE is sponsoring
in the area of next-generation wideband gap power electronics manufacturing,
which is an area that touches all different clean energy technology areas.”

Jonathan
Davis said that the total worldwide market for semiconductor manufacturing
equipment is expected to reach $38 billion dollars next year. Virtually all of
it comes from SEMI member companies. US based SEMI companies produce about $18
billion of that equipment and export about 78 percent of their product.

Davis
said that SEMI members face extraordinary business challenges including constant
and expensive research and development. On average the industry reinvests 10-15
percent of revenues into R&D. Furthermore,
because semiconductor manufacturing is an essential strategic industry, regions
around the world are providing compelling incentives to support local industry
growth including strong inducements for U.S. companies to locate operations overseas.
Often, for both financial and customer appeasement reasons, the pressure to relocate
some operations to other regions is formidable.

In
addition to the substantial R&D investment challenges and competitive
programs from foreign governments, industry faces an ever-present need for
highly skilled technology workers to sustain operations at home. With these many challenges, SEMI believes
that the industry will be encouraged by the bi-partisan public/private
partnership program outlined in the Revitalize American Manufacturing
Innovation Act.

Davis
said, “This legislation represents the needed commitment and leadership by the
United States government to strengthen and grow strategically important
manufacturing industries.”

Due to its high-skilled/high-paying
jobs and $13.5 billion in exports, SEMI members’ U.S. footprint is a good
example of a strategic U.S. manufacturing industry.

The bi-partisan
legislation provides a public private partnership model that has the potential
to strengthen the vertical supply chain of numerous strategic manufacturing
industries.

The legislation won’t assist one particular company or
university. Rather it is designed to support a specific sector supply chains
made up of many small and medium size manufacturing companies to work, develop,
commercialize and manufacture advanced products.

The legislation is also
technology neutral. The government will not predetermine specific technology
mandates. Rather, industries representing many different sectors can bring
forth concepts to commercialize technology into manufactured products. Industry will compete. The most compelling technologies and the best
business plans will surface.

The legislation calls
for the creation of Centers for Manufacturing Innovation — or CMIs. Each CMI
will focus on a specific technology that commercializes technology into manufactured
goods. The Center will be located at a not-for-profit or university — meaning
the center will serve as neutral ground for companies to co-develop technology
at a precompetitive level or to work directly with suppliers and customers to
jointly commercialize manufactured products.

What makes the CMI model
attractive to industry is the legislation doesn’t dictate the model that
industry must use at a CMI. It allows industry and academia to bring forth what
they see as the best model for the CMI to be successful.

The legislation also
states that the Bayh-Dole Act shall not apply if federal financial assistance
is awarded for the purpose of establishing a CMI.

Davis commented, “This
is an important aspect of the legislation. It allows each CMI flexibility to
develop an industry specific IP model. This is a welcomed development as it can
be very difficult to develop a Bayh-Dole IP protocol consortium that involves
many different companies with the host university or not for profit.”

The legislation also
calls for two crucial components to assist the Network for Manufacturing
Innovation Program Office at NIST to review and select wining public private
partnerships. Matching Funds are required and the CMIs must be self-sustaining
without further ederal funding after 7 years.

Davis concluded his
remarks at the Manufacturing Caucus saying, “High tech sectors in the U.S. —
like the one in which SEMI members participate — are under extraordinary
pressure because of enormous R&D requirements as well as attractive foreign
incentives and inducement to relocate. We
believe that establishing Centers for Manufacturing Innovation and the concepts
embodied in the RAMI legislation is an appropriate private/public approach that
meets many of the needs of our industry while giving the taxpayer the best potential
return on their investment.”